An investigation by India’s Competition Commission (CCI) has revealed that Apple Inc. has been exploiting its dominant position in the market for app stores on its iOS operating system. The confidential report, seen by Reuters, marks a critical stage in the ongoing investigation into Apple’s business practices. The CCI has been probing Apple since 2021 for allegedly abusing its market power by mandating developers to use its proprietary in-app purchase system.
Findings of the CCI Report
The CCI’s investigation unit, in a 142-page report, stated that Apple exerts “significant influence” over how digital products and services reach consumers through its iOS platform and App Store. The report emphasized that app developers are left with no choice but to comply with Apple’s stringent terms, which include the compulsory use of Apple’s billing and payment system. This creates an unavoidable trading partner scenario for app developers within the Apple iOS ecosystem, making it indispensable from their perspective.
Apple’s Response and Global Scrutiny
Apple has refuted these allegations, claiming its market presence in India is minor compared to devices running Google’s Android system. Apple and the CCI have yet to comment publicly on the investigation findings.
This investigation in India coincides with increased antitrust scrutiny of Apple in other regions. In June, the European Union’s antitrust regulators found Apple in breach of the bloc’s tech rules, potentially leading to substantial fines. Additionally, Apple faces an investigation into new fees imposed on app developers. In response to the EU’s Digital Markets Act, Apple announced plans to allow software developers to distribute their apps outside its App Store in the European Union.
The Indian Context: Apple vs. Google
The initial complaint against Apple in India was filed by a non-profit group, “Together We Fight Society,” which claimed that Apple’s in-app fee of up to 30% was detrimental to competition by increasing costs for app developers and customers. This was supported by the Alliance of Digital India Foundation and Tinder-owner Match, who filed similar complaints.
The CCI’s report highlighted that Apple does not permit any third-party payment processors to handle in-app purchases, nor does it allow apps to include external links to alternative purchasing mechanisms, contravening Indian competition laws.
Market Dynamics and Future Implications
As of mid-2024, Apple’s iOS powered about 3.5% of the 690 million smartphones in India, with Android dominating the market. However, Apple’s user base in the country has grown significantly over the past five years. Despite Apple’s defense that its market share in India is “insignificant,” the CCI report emphasized the monopolistic nature of Apple’s App Store within the iOS ecosystem.
The final decision by the CCI, which will involve a review by senior officials and responses from Apple and other stakeholders, could result in monetary fines and directives to amend business practices. This decision will be crucial in shaping the landscape of digital market regulation in India and beyond.
